Question 1

When a price ceiling is binding,is the price ceiling set above or below the market equilibrium price?

Accepted Answer

A binding price ceil...

Question 2

Figure 6-27 
-Refer to Figure 6-27.If the government places a $2 tax in the market,the buyer bears $2 of the tax burden.

Accepted Answer

A) True 
 B)False

Question 3

Figure 6-21 
-Refer to Figure 6-22.The amount of the tax per unit is

Accepted Answer

A)   $1.
B)   $1.50.
C)   $2.
D)   $3.E) A) and B)
F) None of the above

Question 4

Figure 6-1

-Refer to Figure 6-1.The price ceiling shown in panel (a)

Accepted Answer

A)   is not binding.
B)   creates a surplus.
C)   creates a shortage.
D)   Both a and b are correct.E) All of the above
F) C) and D)

Question 5

Will a binding price floor result in a shortage or a surplus in the market?

Accepted Answer

A binding price floo...

Question 6

A price ceiling is always a binding price control,whereas a price floor may be either binding or not binding.

Accepted Answer

A) True 
 B)False

Question 7

A price floor is a legal minimum on the price at which a good or service can be sold.

Accepted Answer

A) True 
 B)False

Question 8

A tax on buyers shifts the demand curve to the right.

Accepted Answer

A) True 
 B)False

Question 9

A tax on sellers usually causes buyers to pay more for the good and sellers to receive less for the good than they did before the tax was levied.

Accepted Answer

A) True 
 B)False

Question 10

Figure 6-14
The vertical distance between points A and B represents the tax in the market. 
-Refer to Figure 6-14.The per-unit burden of the tax on buyers is

Accepted Answer

A)   $6.
B)   $8.
C)   $14.
D)   $24.E) A) and B)
F) C) and D)

Question 11

Which of the following is not correct?

Accepted Answer

A)   The economy contains many labor markets for different types of workers.
B)   The impact of the minimum wage depends on the skill and experience of the worker.
C)   The minimum wage is binding for workers with high skills and much experience.
D)   The minimum wage is not binding when the equilibrium wage is above the minimum wage.E) A) and D)
F) B) and D)

Question 12

If the government removes a $2 tax on buyers of cigars and imposes the same $2 tax on sellers of cigars,then the price paid by buyers will

Accepted Answer

A)   not change,and the price received by sellers will not change.
B)   not change,and the price received by sellers will decrease.
C)   decrease,and the price received by sellers will not change.
D)   decrease,and the price received by sellers will decrease.E) B) and D)
F) C) and D)

Question 13

Figure 6-15 
-Refer to Figure 6-15.Suppose a tax of $2 per unit is imposed on this market.How much will buyers pay per unit after the tax is imposed?

Accepted Answer

A)   $3
B)   between $3 and $5
C)   between $5 and $7
D)   $7E) B) and D)
F) B) and C)

Question 14

Which of the following is not correct? In a 2006 survey of Ph.D.economists,

Accepted Answer

A)   47 percent favored eliminating the minimum wage.
B)   14 percent would maintain the minimum wage at its current level.
C)   38 percent would increase the minimum wage.
D)   10 percent would decrease the minimum wage.E) A) and B)
F) B) and C)

Question 15

A binding price ceiling 
(i) Causes a surplus.
(ii) Causes a shortage.
(iii) Is set at a price above the equilibrium price.
(iv) Is set at a price below the equilibrium price.

Accepted Answer

A)   (ii) only
B)   (iv) only
C)   (i) and (iii) only
D)   (ii) and (iv) onlyE) None of the above
F) B) and D)

Question 16

In an unregulated labor market,the wage adjusts to balance labor supply and labor demand.

Accepted Answer

A) True 
 B)False

Question 17

A binding price ceiling causes quantity demanded to be less than quantity supplied.

Accepted Answer

A) True 
 B)False

Question 18

A tax levied on the sellers of blueberries

Accepted Answer

A)   increases sellers' costs,reduces profits,and shifts the supply curve up.
B)   increases sellers' costs,reduces profits,and shifts the supply curve down.
C)   decreases sellers' costs,increases profits,and shifts the supply curve up.
D)   decreases sellers' costs,increases profits,and shifts the supply curve down.E) A) and C)
F) A) and B)

Question 19

Figure 6-8 
-Refer to Figure 6-8.If the government imposes a price floor of $5 on this market,then there will be

Accepted Answer

A)   no surplus of the good.
B)   a surplus of 20 units of the good.
C)   a surplus of 30 units of the good.
D)   a surplus of 55 units of the good.E) C) and D)
F) All of the above

Question 20

The mayor of Workerville proposes a local payroll tax to fund a new water park for the city.The mayor proposes to collect half the tax from workers and half the tax from firms.The mayor will be able to successfully divide the burden of the tax equally if the

Accepted Answer

A)   demand for labor is more elastic than the supply of labor.
B)   supply of labor is more elastic than the demand for labor.
C)   demand for labor and supply of labor are equally elastic.
D)   It is not possible for the tax burden to fall equally on firms and workers.E) All of the above
F) B) and D)

Exam 6: Supply,demand,and Government Policies

The mayor of Workerville proposes a local payroll tax to fund a new water park for the city.The mayor proposes to collect half the tax from workers and half the tax from firms.The mayor will be able to successfully divide the burden of the tax equally if the

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If the government removes a $2 tax on buyers of cigars and imposes the same $2 tax on sellers of cigars,then the price paid by buyers will

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Will a binding price floor result in a shortage or a surplus in the market?

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When a price ceiling is binding,is the price ceiling set above or below the market equilibrium price?

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Figure 6-1 -Refer to Figure 6-1.The price ceiling shown in panel (a)

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A tax on sellers usually causes buyers to pay more for the good and sellers to receive less for the good than they did before the tax was levied.

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A tax levied on the sellers of blueberries

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Figure 6-15 -Refer to Figure 6-15.Suppose a tax of $2 per unit is imposed on this market.How much will buyers pay per unit after the tax is imposed?

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A price floor is a legal minimum on the price at which a good or service can be sold.

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A binding price ceiling (i) Causes a surplus. (ii) Causes a shortage. (iii) Is set at a price above the equilibrium price. (iv) Is set at a price below the equilibrium price.

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In an unregulated labor market,the wage adjusts to balance labor supply and labor demand.

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Figure 6-21 -Refer to Figure 6-22.The amount of the tax per unit is

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A price ceiling is always a binding price control,whereas a price floor may be either binding or not binding.

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Figure 6-14 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-14.The per-unit burden of the tax on buyers is

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Figure 6-8 -Refer to Figure 6-8.If the government imposes a price floor of $5 on this market,then there will be

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Which of the following is not correct? In a 2006 survey of Ph.D.economists,

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A tax on buyers shifts the demand curve to the right.

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Which of the following is not correct?

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Figure 6-27 -Refer to Figure 6-27.If the government places a $2 tax in the market,the buyer bears $2 of the tax burden.

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A binding price ceiling causes quantity demanded to be less than quantity supplied.

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A binding price floo...
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